Abu Dhabi aims to increase its oil production capacity by 25% over the next decade

ADNOC boosts energy production with purchase of two new-build tankers from China

REUTERS/CHRISTOPHER PIKE - Logo of Abu Dhabi National Oil Company (ADNOC)

The United Arab Emirates is doubling down on hydrocarbons in the midst of a global fuel shortage. ADNOC Logistics and Services, the transport company associated with the Abu Dhabi National Oil Company, has this week acquired two new-build vessels for the transport of liquefied natural gas, which it will integrate into its fleet with the aim of increasing its production in a delicate global context.

China will supply Abu Dhabi with these two new tankers, which will be available to ADNOC from 2025. This was announced by the state-owned oil company in a statement in which it announced the construction of two tankers at the Jiangnan shipyard in Shanghai. They are expected to be larger than any other vessels in its fleet, which average 137,000 cubic metres, with 175,000 cubic metres.

Each vessel will be able to carry enough liquefied natural gas (LNG) to supply 45,000 households for a year. "The new LNG carriers will be crucial enablers of ADNOC's 2030 growth strategy, supporting its existing LNG business as well as its ambitions to increase its liquefied natural gas production capacity," the company said.

Buque GNL

ADNOC Logistics and Services CEO Captain Abdulkareem Al Masabi said the expansion and modernisation of our LNG fleet "will be a key element in ADNOC L&S' growth strategy". "This acquisition helps prepare our fleet for the future with more sustainable and modern vessels, capable of serving our customers for the next 25 years, and deepens our partnership with Jiangnan Shipyard," he said.

Jiangnan Shipyard's president said he was "proud" to extend its relationship with the Emirati company: "This order for large LNG carriers is another milestone in Jiangnan Shipyard's strategic portfolio. We are committed to deliver these vessels on time, with good quality and ensuring maximum customer satisfaction".

ADNOC aims to increase its oil production capacity by 25% over the next decade, which would amount to five million barrels per day, and to achieve the long-awaited self-sufficiency in gas production by the end of 2030. The Gulf state, through Abu Dhabi, also plans to double its LNG production capacity, currently at 12 million tonnes per year, in the next five years.

In the last two years, the state-owned oil company has purchased up to 16 offshore vessels, including eight Very Large Crude Carriers (VLCC), the largest class of tankers, as well as five Very Large Gas Carriers for AW Shipping. These acquisitions bring their capacity to 16 million barrels and more than one million tonnes.

Gas natural licuado

ADNOC is shelling out an exorbitant amount of money as a result of its strategy to pump more 'black gold' and gas. A roadmap that is based on the premise that this demand will not only continue to be relevant, but also important in the coming decades. Even more so in a scenario conditioned by the Russian invasion of Ukraine, which has reduced energy supply, pushing European countries to replace gas supplies from Russia.

The US financier Morgan Stanley estimates that global LNG consumption will increase by 60% by 2030. A rosy projection for the third largest producer in the Organisation of the Petroleum Exporting Countries (OPEC), which has also committed to achieving carbon neutrality by 2050, an ambitious plan for one of the regions with the highest per capita energy consumption and emissions.

The UAE and its Persian Gulf neighbours, such as Saudi Arabia and Oman, are working hard to make their reserves profitable before global demand for oil and gas declines. Most likely, however, spending will continue, as the sharp rise in commodity prices has demonstrated the global scarcity of commodities, from oil to gas to metals.